tv Bloomberg West Bloomberg July 2, 2015 4:30pm-5:01pm EDT
cory: tesla reports record sales in the second quarter, why is it still falling short? i'm cory johnson in for emily chang and this is "bloomberg west." yelp cancels its sales plan and the stock cries for help. abandoning intel after not being named ceo and the rise of the machine in hip-hop. we will show you a wrap battle between -- arap battle.
tesla getting a thumbs up, the company delivering 11,500 model s sedans, above the 10,000 it forecast for itself. still, they are less than 40% of the way to its full-year target of 755,000 cars. joining me now is matt miller and kevin tynan. when you analyze these numbers how should we look at these numbers? is their own forecast, so maybe that's not so impressive. kevin: and even if you set them up yourself -- the real factor is going to be the model x coming in the second half of the year. and if that's on-time and on target, that's probably a more important metric than what we
saw with the first half of the year. cory: a substantial difference in terms of the growth rate. the number i look at his sequential growth. you will know more about cars than i will forget -- or you will forget more about cars than i will ever know. the year over year thing come at this stage in the company, the right way to look at it is quarter over quarter. matt: absolutely. and it's the way analysts in the industry are looking at it. you have 15% growth second quarter over first quarter. so even though they sold less than 40% of the cars they have forecast for the full year, they want to sell 55000 and heavily sold 21,000 in the first half, they only have to grow 12% or 13% in each of the consecutive quarters to meet their projections. and let's face it. it's all about the model x right
now. if it comes out in this current quarter or the beginning of the next order, that should put them easily at their target because the demand is huge and the orders have already flowed in for that model. cory: i assume the way these sales rollout is like an oil well where the most production happens right after the new release. this is a new car and had egg sales. a little better growth in the third quarter of the cars sale the revamped all-wheel-drive vehicle. is it fair to say that when we see the model x the demand will behind? kevin: yes and you will fill in those orders of those customers who have been waiting in line to get the vehicle. it's not going to be another inexpensive vehicle and i think when model three comes out depending on where those units are transacting, it will be the biggest deal in terms of long-term volume growth.
very difficult in terms of model s and model x which will probably close to $90,000 in options. if you are looking for longer-term volume, it's going to come at lower price points than what we are seeing now. cory: in other words, the $75,000 base for the model s $95,000 is the average cost per car. you are saying the real market is for the model three that is expected -- when is it expected? matt: the tesla three by 2017 they should have them in production and be heading out the door. i'm not sure how profitable the car is going to be because keep in mind, for the model s which starts at around $70,000 without
any options, more than half of the cost of the cars in the battery. a lot of what elon musk and investors have been banking on is battery costs would come down or battery power with double. cory: half the cost of a $70,000 car is the battery and half the cost of $70,000 is $35,000. they can't cut the cost to zero. that doesn't get to zero. matt: they hope that battery costs will come down and battery capacity will climb. but it hasn't been happening in a way that silicon valley is used to. cory: i want to go back to that chart about the timeline of what tesla has said about the shipping data on the model three because this is important and i
don't think people have focused on it enough. i think the timeline is slipping. in march of 2014, he said it would be 2017. then he said it would be the second half of 2017. in may, he's in may, he said late 2017 and then there was a slide that said 2018 and the company explained full production won't be until 2018. that sounds to me like they are pushing this out because they're not getting the advances they want. kevin: yes and to matt's point about the model three being profitable that's not what is a port it's that they get the product to the market. the market hasn't cared about profitability until this point anyway. it's about hitting the volume targets. the range is supposed to be 200 miles, so you are not talking about the battery pack you would see, so there would because savings there as well.
these are high hurdles and the giga factory is a big deal if you are going to do a vehicle targeted at $35,000. matt: i also want to point out that an analyst you're watching elon musk, by now, you understand the pattern. he may be doesn't overpromise but he promises things a lot earlier than they come. they have a standard habit of saying we are going to put a vehicle out this year and then we're going to do it x year and in the first half of the year after that. this is normal. you can almost set your watch to how late they are with every product release. cory: wall street analysts are building their numbers based on these numbers. matt miller, thank you very much. and kevin, we appreciate your time as well.
yelp is having a change of heart. they are pulling themselves off the block. the sales process is toast. shares are down quite a bit down 24% over the year. yelp is profitable, sales growth, the declining it is -- though declining, it is profitable. coming up, the ceo behind the biggest commercial satellite deal in history will show usinternet that. and where hip-hop and big data collide -- we will explain to you what twista was doing rapping at bloomberg. ♪
cory: revolving door or glass ceiling? the highest ranking woman stepping down -- she will leave her post as the president of intel at the end of the year. she spent 28 years with the chipmaker, including time as an assistant to the former chief executive, and the grower. she became president in 2013. she's leaving to pursue a ceo job somewhere else. sales of what of the largest commercial rocket deals in history -- one web partnering with richard branson 439
launches. it's something with the internet beaming satellite to space. this is at the top -- on top of a massive $5 million funding round -- $500 million on the ground. joining us to talk about the company's progress is the company's ceo. what are you trying to get done? guest: we want to enable affordable internet access for everyone. we are building a system that can provide low-cost access to people in rural areas around the world. cory: are there particular parts of the world that can do that? guest: farmhouses in iowa are certainly one market. locally there are billions of
people that have no access. it only covers a small percentage of the total market and its super important that we get internet access for everyone. if you don't have that access you are economically disadvantaged from the rest of the world. cory: it is interesting, but is there enough to make a business out of it. at least with the difficulty is in terms of the market at that time. guest: think about the telecom industry right now. they invested in one web and they have 300 million customers. if you contrast that with at&t and verizon, there's a large market out there not in the u.s. literally billions of people. we are able to provide to
aviation, maritime, oil and gas and satellite operators there are 30,000 new commercial airliners coming on in the next 20 years. cory: talk to me about how that works. i've watched the satellite services the service you are trying to offer in terms of ace need and connection for planes. i've watched gogo gobble up market share. it's a pain in the but to rewire airplanes. guest: the new airplanes will have fresh wiring in them. the key for airlines is to have a single antenna can work globally and you don't have that . you have one antenna that might work in the u.s. and another that might work in europe. so airlines come as a transfer from country to country, they don't have an easy way to get internet access. cory: and there are a gazillion
guest: satellites up there. that's not the cory: exact number. what is the exact number? guest: 648 satellites could give us capacity for the world. cory: is it the same internet access you would get at 35 thousand feet as on the ground? guest: you can have 50 megabits per second hatcher farmhouse in iowa. the services that will come over one web are identical bit for bit for a cable modem. cory: thank you for providing me the opportunity to get out of san francisco. now is the moment when big data science and hip-hop arrive. perhaps the rappers should be
fearing for their job. the next big wrapper may not be straight out of compton or the lb see, but out of helsinki. they are big data rap fans and scientists. >> i'm a doctoral student in data mining. cory: they have created an algorithm to perfect wrap composition. it acts like google search, scanning a database of songs by 104 different artists and then ranks them by rhyme density. the lonely island is 94. then they pull from the bank to write its own rhymes. he says they are 21% more rhyme dense than raps written by humans. so we at them to the test with a wrap with twista who holds the
guinness book of world records for the fastest wrap. and now deep beats. >> i don't know. the lyrics the computer generated are not hot lyrics. the human vibe that comes with listening to music or doing rhymes or singing -- the computer can only go so far with it. cory: there are real commercial uses for deep be like software. this is another application of machine learning -- computer code that mimics human thought. machines using this kind of artificial intelligence are expected to grow to a $15 billion market by 2019. >> you have series to you can
chat with but if you want to make beats more intelligent and be able to interact with, you can use these. cory: so for now, twista's job is safe. twista: the computer has a long way to catch up with twista. cory: the next step for deep beats is to pair it with a speech synthesizer so it could actually spit out some of these rhymes. i am not going to rhyme for you. but coming up, robots rolling into tokyo. these baggage carrying bots could be the beginning of japan's robotic workforce. and the lower of hollywood got the best of federal investigators with the dark web drug marketplace. we'll talk about temptation and the dark web, next. ♪
cory: and now time for the daily byte -- $240,000. that's the amount the lead investigator from the silk road investigation try to pocket from a secret movie deal with 20th century fox. the details of the former dea agent's extortion was released and the agent pled guilty to extorting 100 thousand dollars in bitcoins. he also pled guilty to using his federal position to seize another $300,000 worth of bitcoin from an unidentified user. in the end, he amassed $457,000
on his undercover crime spree. he's looking at a maximum sentence of 20 years in prison. 20th century fox not respond to phone calls seeking comment on the deal. with a shrinking and aging workforce, japan is putting robots to work. the tokyo airport is releasing 11 robots to clean and carry luggage, but airport officials say it's only just the beginning. what does it take to really integrate robots into the workforce? the clear path robotics cofounder joins me now from toronto. how hard is it to work with robots? guest: it depends on what sort of robots we are talking about. that's why japan is rolling them out slowly piece by piece. we have been working with some robots for decades in manufacturing, but there has
been a lot of media coverage talking about robots making it into everyday lives and that's a very interesting question. cory: i went to the amazon facility in central california and they have these robots moving stuff around. they are literally separated by a cage from the humans. it didn't occur to me that the metaphor might be a zoo, but the actual interaction with the robot, they were prevented from having one. ryan: the amazon system they have is interesting. i used to work there a few years ago. it's a very good system, but it is a system that came about 10 years ago and now we are seeing a lot more evolution in what
systems are able to do in their interactions day today with people. that's much more possible now. we are seeing drones and self driving cars able to interact with people. that's what many companies are designing for because the amazon systems are doing a great job for where they are right now. the marketplace the consumers are asking for more robotics everywhere. cory: if you think robots are weird, you should see people. how do you deal with the human side of the interaction to get the human ready to work with the robot? ryan: it's a huge challenge. because of that challenge, we are starting in relatively controlled environments, not as controlled as the amazon system, but in manufacturing and logistics and retail despite
having many pedestrians around it's much more controlled than city streets. i know that is a challenge that google, audi, volvo and other car companies working on the self driving car are facing. how do you challenge the robot sufficiently ahead of time with all of the weird things people will do on a daily basis once they are out on the streets? cory: you are building robots that do all kinds of weird things -- robots and all-terrain places. talk about those challenges. those are both removed from controlled environments, but they're also removed from people themselves. ryan: honestly, dealing with people is one of the largest challenges. cory: i find it difficult also. ryan: we are trying to build smaller -- smarter tools that can help people so they can
focus on what they are good at. that is the real challenge. a robot out there in the middle of nowhere is certainly a challenge, but it is a challenge that has been faced in the past already. to have intelligent systems interacting with people both as operators as well as people they might happen to come across in their travels, that is the real challenge there. cory: what is the industry where you think you're going to get the most traction? ryan: we are starting to see tons of traction in manufacturing, logistics, and mining. we are only starting to see increases, but retail is another strong case. it's very controlled but at the same time there are tons of stores out there where there's a possible use of robotics. cory: the cofounder of clear path robotics. thank you very much.